Monday, February 27, 2012

Maruti, Hyundai zero in countryside to step up sales of their cars in India

Soon you will find a Maruti Swift Dzire CS or a new Hyundai i10 or i20 at a newly opened showroom in the countryside as Maruti and Hyundai; the two big players in the Indian auto industry are exploring new markets especially rural areas for their car sales. Reason: growth prospects in cities are diminishing primarily due to increase in competition and secondly due to saturation. As part of the new (though not so new) strategy, these car makers are thinking of pitching in their tents and showcasing their cars in potential markets of India. Already, Tata is adopting a similar strategy for its world’s cheapest small car Tata Nano.

Basically, Maruti and Hyundai (no wonder other car makers may follow suit), will be targeting markets which have potential car buyers in India. These could then be major markets of some other products or production hubs of products. As part of this strategy, Maruti and Hyundai management is busy in zeroing in potential markets for cars and have come up with ideas to target turmeric, mango, apples, granite, marble pottery etc production and sale hubs in India. In order to explore possibilities in these markets, officials are working day in and day out to finalize new markets before showrooms are erected there.

Notably, car makers have been choosing the major 20 cities including metros for their car launches as 40 percent of the car demand comes from these cities. However with a saturation level achieved in these cities, car makers have decided to venture out to more potential and relatively unexplored markets in the country. For car makers rural area have never been the priority but in an attempt to expand their reach and put new numbers on the sales charts, car companies are targeting new markets including Tier II and Tier III cities. as per an estimate, rural areas pose 35 percent of the car sales in India. Thus adding these areas Maruti and Hyundai will be addressing a major part of the car market. Other car companies such as General Motors, Toyota and Ford besides other are expected to follow the same trend. Tata Motors is already doing it for Tata Nano.